23 October 2015

Co-authored by Shannett Thompson, Lucy Williams from our Regulatory and Professional Discpline team, and Camilla Whitehouse, founder of Gainsborough Law.

Not to be confused with a ‘House in Multiple Occupation’ (HMO) licence, an increasing number of Local Authorities have introduced Selective Licensing for landlords. If your property is within a selective licensing zone you must hold a licence regardless of its occupation and size (as distinct from the HMO licence).

If you are found to be without a licence you may be prosecuted and prevented from renting out your property in the immediate future.

Sections 79, 80 and 81 of the Housing Act 2004 (“the Act”) provided for the introduction of the selective licensing of private landlords. The Act came into force in April 2006 and thereafter, on 27 March 2015, the Selective Licensing of Houses (Additional Conditions) (England) Order 2015 (SI 2015/977) came into force. The Order specifies additional conditions that if satisfied, enable Local Authorities to designate an area as subject to selective licensing.

As a result of the changes in legislation and increasingly successful prosecution of landlords, selective licensing is garnering increasing support with Local Authorities. It has been rolled out by some Local Authorities fairly recently, for example it was extended to Liverpool in April of this year.

Selective licensing was brought into effect to try to address the impact of poor quality private landlords and reduce levels of antisocial behaviour, by ensuring that landlords are ‘fit and proper’ to hold a licence. The legislation was primarily introduced to tackle problems in areas of low housing demand, but the Act also allows for selective licensing in other circumstances. As a private landlord, you have a responsibility to check whether any rental property you own and/or manage falls in a selective licensing zone.

If the Local Authority believes that you have breached licence conditions they can take you to Court, where you can face a fine of up to £5,000 for each offence. Equally, if you are found to be operating a property without a licence in a designated area, a fine of up to £20,000 can be made against you.

Three landlords in Hyndburn, Lancashire, have become the first to be prosecuted for failing to comply with the requirements of the Council’s Selective Licensing Scheme, which was introduced in the area in 2012. In short:

One landlord appeared at Hyndburn Magistrates’ Court on 6 August 2015 to face an offence under section 95 of the Housing Act 2004, for failing to correctly licence her rental property; and

Two landlords faced charges at Hyndburn Magistrates Court in September 2015 for failing to obtain a licence.

In addition to the aforementioned landlords, Thanet District Council took a London-based landlord to court. He had been previously fined £15,000 for failing to comply with selective licensing, and was then fined on a second occasion to the sum of £20,000 for renting out a property without a selective licence.

What do you need to do if you are a private landlord?

Check with the Council in which your rental property is based to ascertain whether a selective licensing zone is in place;

If a selective licensing zone is in place, be sure that you follow the relevant Council’s application process to obtain a licence; and

Upon being granted a licence, ensure that you and your managing agents familiarise yourself with and adhere to the conditions attached to it at all times.

It is very likely that there will be an increase in the number of prosecutions under this scheme. Now is the time for landlords to check whether they are in a selective licensing zone and, if so, take immediate action.